[Federal Register Volume 63, Number 228 (Friday, November 27, 1998)]
[Proposed Rules]
[Pages 65563-65565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31588]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 63, No. 228 / Friday, November 27, 1998 / 
Proposed Rules  

[[Page 65563]]


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NORTHEAST DAIRY COMPACT COMMISSION

7 CFR Chapter XIII


Over-Order Price Regulation

AGENCY: Northeast Dairy Compact Commission.

ACTION: Notice of Proposed Rulemaking Proceedings.

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SUMMARY: The Northeast Dairy Compact Commission is seeking testimony 
and comments on specific subjects and issues related to: Whether to 
amend the formula for distribution of monies from the producer-
settlement fund, including whether to adopt a cap on the amount of 
milk, per producer, eligible for the Compact Over-order producer price; 
whether additional supply management policies and provisions should be 
incorporated into the Over-order Price Regulation; whether organic milk 
should be exempted from the Compact Over-order Price Regulation; and 
whether the amount of, or method for determining, the administrative 
assessment should be amended.

DATES: See Supplementary Information section for public hearing dates 
and filing dates for pre-filed testimony and written comments and 
exhibits.

ADDRESSES: Mail, or deliver, pre-filed testimony, comments and exhibits 
to: Northeast Dairy Compact Commission, 43 State Street, P.O. Box 1058, 
Montpelier, Vermont 05601. See Supplementary Information section for 
public hearing locations.

FOR FURTHER INFORMATION CONTACT: Kenneth M. Becker, Executive Director, 
Northeast Dairy Compact Commission at the above address or by telephone 
at (802) 229-1941, or by facsimile at (802) 229-2028.

SUPPLEMENTARY INFORMATION:

I. Public Hearing Dates, Times and Locations; Filing Dates for 
Written Comments

    The public hearing dates and locations are:
    1. December 11, 1998, 9:00 a.m. to 12:00 p.m., at the Holiday Inn 
at Boxborough Woods, Parade Room, 242 Adams Place, Boxborough, MA, 
public hearing on administrative assessment.
    2. December 11, 1998, 1:00 p.m. to 4:00 p.m., at the Holiday Inn at 
Boxborough Woods, Parade Room, 242 Adams Place, Boxborough, MA public 
hearing on income distribution and supply management.
    3. December 16, 1998, 9:00 to 12:00 p.m., at the Tuck Library 
Building, Chubb Auditorium, 30 Park Street, Concord, NH public hearing 
on organic milk.
    4. Pre-filed testimony is encouraged and may be submitted to the 
Northeast Dairy Compact Commission at the address in the ADDRESSES 
section by 12:00 p.m. December 7, 1998.
    5. Written comments and exhibits may be submitted until 5:00 p.m. 
December 31, 1998.

II. Background

    The Northeast Dairy Compact Commission initially promulgated an 
Over-order Price Regulation on May 30, 1997.1 The regulation 
was subsequently amended generally and extended on November 25, 
1997.2 Over the past year, the Commission also has amended 
specific provisions of the Over-order Price Regulation.3 The 
Commission is now seeking testimony and comment on specific subjects 
and issues related to (1) whether to amend the formula for distribution 
of monies from the producer-settlement fund, including whether to adopt 
a cap on the amount of milk, per producer, eligible for the Compact 
Over-order producer price; (2) whether additional supply management 
policies and provisions should be incorporated into the Over-order 
Price Regulation; (3) whether organic milk should be exempted from the 
Compact Over-order Price Regulation; and (4) whether the amount of, or 
method for determining, the administrative assessment should be 
amended.
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    \1\ 62 FR 29626 (May 30, 1997).
    \2\ 62 FR 62810 (November 25, 1997).
    \3\ 63 FR 10104 (Feb. 27, 1998); 63 FR 46385 (Sept. 1, 1998); 
and the most recent amendment is published elsewhere in this issue 
of the Federal Register.
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III. Statement of Subjects and Issues

(1) Income Distribution From the Producer-Settlement Fund

    The Massachusetts delegation to the Compact Commission petitioned 
the Commission to consider a policy change that would alter the income 
distribution provisions of the current Over-order Price Regulation by 
placing a cap on the amount of milk, per producer, that would be 
eligible to receive the Compact Over-order producer price.

(2) Supply Management Policies

    Article IV, Section 9(f) of the Compact requires the Commission to 
``take such action as necessary and feasible to ensure that the over-
order price does not create an incentive for producers to generate 
additional supplies of milk.'' The Commission's Committee on 
Regulations and Rulemaking previously held five public meetings to 
receive informal public comment on various supply management proposals 
that are consistent with the Commission's Section 9(f) 
responsibilities. The Commission also recently promulgated a 
regulation, effective January 1, 1999, that will limit the payment of 
the Compact Over-order producer price to milk disposed of within the 
Compact regulated area, with a seasonally adjusted allowance for 
diverted and transferred milk.4 The Commission now seeks 
formal public comment on whether any additional supply management 
policies and provisions should be incorporated into the Over-order 
Price Regulation.
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    \4\ As published elsewhere in this issue of the Federal 
Register.
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(3) Organic Milk

    Organic milk handlers have petitioned the Commission to consider 
exempting organic milk from the Compact Over-order Price Regulation.

(4) Administrative Assessment

    The Commission determined that it would benefit from comments and 
testimony regarding whether the amount of, or method for determining, 
the administrative assessment should be amended. The current 
administrative assessment regulation was promulgated with the initial 
price regulation on May 30, 1997.5 The November 25, 1997 
extension of the price regulation

[[Page 65564]]

maintained the administrative assessment.6 In addition to 
comments on the specific proposals, discussed below, to address the 
identified subjects and issues, the Commission also would welcome 
comments, suggestions, and recommendations for other policies or 
methods for addressing the issues of income distribution, supply 
management, organic milk and the administrative assessment.
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    \5\ 62 FR 29626, codified at (7 CFR 1308.1).
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IV. Specific Proposals

    The Commission seeks comment and analysis of the following 
proposals. (A comparison chart of the producer payments under the 
current price regulation and the impact of the main income distribution 
proposals, discussed at sections 1 and 2 below, is provided at Table 1 
to facilitate comment and analysis of the various proposals.) The 
Commission specifically requests comments regarding the effectiveness 
of each of these proposals in light of the Commission's mission to 
assure the continued viability of dairy farming in the northeast, and 
to assure consumers of an adequate, local supply of pure and wholesome 
milk.

1. The Massachusetts Cap Proposal

    This proposal would limit the milk eligible for the Compact Over-
order producer price to up to 95,000 pounds of a producer's monthly 
milk production, or 1.14 million pounds per year. This proposal would 
not provide any Compact Over-order producer price for milk produced in 
excess of the cap.

2. Split Pool Proposal

    A split pool also would address the income distribution aspects of 
the Over-order Price Regulation. Under this proposal, a certain 
percentage of the total value of the monthly producer pool would be 
divided equally among all qualified farms supplying the New England 
market, regardless of farm size. The balance of the pool would be paid 
out on a per hundredweight basis, as it is under the current 
regulation. For example, the pool could be divided to distribute the 
first 55% of the pool on a per farm basis and distribute the remaining 
45% of the pool on a per hundredweight basis. An alternate proposal 
would be to distribute the first 25% of the pool on a per farm basis 
and distribute the remaining 75% on a per hundredweight basis.

                                    Table 1.--Comparison of Various Proposals
                                                   [July 1998]
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                                                                                   55%/45% split   25%/75% split
           No. of cows                 Lbs.       Actual compact    95,000 CAP       (dollars)       (dollars)
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 12.............................          20,000             238             422             986             577
 18.............................          30,000             357             633           1,037             665
 29.............................          50,000             595           1,055           1,139             841
 41.............................          70,000             833           1,477           1,241           1,017
 56.............................          95,000           1,131           2,005           1,369           1,237
 58.............................         100,000           1,190           2,005           1,394           1,281
 64.............................         110,000           1,309           2,005           1,445           1,369
 70.............................         120,000           1,428           2,005           1,496           1,457
 76.............................         130,000           1,547           2,005           1,547           1,539
 82.............................         140,000           1,666           2,005           1,598           1,633
 88.............................         150,000           1,785           2,005           1,649           1,721
 94.............................         160,000           1,904           2,005           1,700           1,809
 99.............................         170,000           2,023           2,005           1,751           1,897
105.............................         180,000           2,142           2,005           1,802           1,985
111.............................         190,000           2,261           2,005           1,853           2,073
117.............................         200,000           2,380           2,005           1,904           2,161
123.............................         210,000           2,499           2,005           1,955           2,249
129.............................         220,000           2,618           2,005           2,006           2,337
135.............................         230,000           2,737           2,005           2,057           2,425
146.............................         250,000           2,975           2,005           2,159           2,601
175.............................         300,000           3,570           2,005           2,414           3,041
205.............................         350,000           4,165           2,005           2,669           3,481
234.............................         400,000           4,760           2,005           2,924           3,921
264.............................         450,000           5,355           2,005           3,179           4,361
292.............................         500,000           5,950           2,005           3,434           4,801
351.............................         600,000           7,140           2,005           3,944           5,681
400.............................         700,000           8,330           2,005           4,454           6,561
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3. Proposal To Cap the Largest Producers

    This proposal would set a cap on the amount of milk, per producer, 
eligible for the Over-order producer price, but at a level much higher 
than under the Massachusetts proposal discussed in section 1 above. 
Under this proposal, the cap for all farms producing more than 600,000 
pounds per month would be set at the 1998 production level.
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    \6\ 62 FR 62810 (Nov. 25, 1997).
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4. Refund/Assessment Option

    This proposal would establish an assessment on all milk during the 
year at some percentage of each month's producer pool. The assessment 
would be held in escrow and returned to eligible producers at some 
frequency, e.g. annually, semi-annually or quarterly. Producers would 
be eligible for a refund from the assessment only if they document that 
they did not increase production during the relevant time period. The 
Commission would welcome comments regarding the level to set the 
assessment percentage to ensure an effective supply management result.

5. Exemption of Organic Milk From the Compact Over-Order Price 
Regulation

    This proposal would exempt organic milk handlers from the Compact 
Over-order Obligation and exclude organic milk producers from the 
producer pool.

[[Page 65565]]

6. Amendment of the Administrative Assessment Regulation

    The current administrative assessment regulation, 7 CFR 1308.1, 
establishes a set rate of 3.2 cents per hundredweight of fluid milk as 
determined under 7 CFR 1306. This assessment is due monthly from all 
handlers regulated under the Over-order price regulation. The 
Commission seeks testimony and comments on whether the amount of the 
administrative assessment, or the method for determining the 
administrative assessment, should be amended.

Official Notice of Technical, Scientific or Other Matters

    Pursuant to the Commission regulations, 7 CFR 1361.5(g)(5), the 
Commission hereby gives public notice that it may take official notice, 
at the public hearings on December 11 and December 16, 1998, or 
afterward, of relevant facts, statistics, data, conclusions, and other 
information provided by or through the United States Department of 
Agriculture, including, but not limited to, matters reported by the 
National Agricultural Statistics Service, the Market Administrators, 
the Economic Research Service, the Agricultural Marketing Service and 
information, data and statistics developed and maintained by the 
Departments of Agriculture of the States or Commonwealth within the 
Compact regulated area.

Request for Pre-filed Testimony and Written Comments

    Pursuant to the Commission rules, 7 CFR 1361.4, any person may 
participate in the rulemaking proceeding independent of the hearing 
process by submitting written comments or exhibits to the Commission. 
Comments and exhibits may be submitted at any time before 5:00 p.m. on 
December 31, 1998. Comments and exhibits will be made part of the 
record of the rulemaking proceeding only if they identify the author's 
name, address and occupation, and if they include a sworn notarized 
statement indicating that the comment and/or exhibit is presented based 
upon the author's personal knowledge and belief. Facsimile copies will 
be accepted up until the 5:00 p.m. deadline, but the original must then 
be sent by ordinary mail.
    The Commission is requesting pre-filed testimony from any 
interested person. Pre-filed testimony must include the name, address 
and occupation of the witness and a sworn notarized statement 
indicating that the testimony is presented based upon the author's 
personal knowledge and belief. Pre-filed testimony must be received in 
the Commission office no later than 12:00 p.m. December 7, 1998 to 
ensure distribution to Commission members prior to the public hearings.
    Pre-filed testimony, comments and exhibits should be sent to: 
Northeast Dairy Compact Commission, 43 State Street, P.O. Box 1058, 
Montpelier, Vermont 05601 or by facsimile to (802) 229-2028.

    Dated: November 19, 1998.
Dixie L. Henry,
General Counsel.
[FR Doc. 98-31588 Filed 11-25-98; 8:45 am]
BILLING CODE 1650-01-P